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MAS asserts no conflict of interest in appointment of Morgan Stanley as financial advisor in Allianz deal

Second Minister for Finance Chee Hong Tat confirmed MAS reviewed and approved Morgan Stanley’s appointment as advisor for the Allianz-Income deal, as the chairman recused himself from the decision.

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The Monetary Authority of Singapore (MAS) has assured itself that there is no conflict of interest in the appointment of Morgan Stanley as the financial advisor for the sale of a majority stake in Income Insurance to Allianz.

This was said by the Second Minister for Finance and Deputy Chairman of MAS, Mr Chee Hong Tat, on Tuesday in response to parliamentary questions regarding the deal.

According to Income’s statement on 17 July, Morgan Stanley was named the exclusive financial advisor to Income Insurance on the purchase offer by Allianz Europe of 51% of Income’s shares for approximately US$1.6 billion. The offer includes S$40.58 per share, resulting in a transaction value of S$2.2 billion (US$1.64 billion) for 51 percent of the shares in Income Insurance.

NTUC Enterprise, currently holding a 72.8 percent stake in Income, will remain a substantial shareholder if the sale is finalized but will no longer be the majority shareholder.

The proposed sale of Income Insurance to German multinational financial services company Allianz has sparked significant public discontent and raised serious questions about corporate governance within the organization.

Industry experts and concerned citizens have voiced worries about potential conflicts of interest and the future of the homegrown insurance company.

Mr Chee addressed the MPs’ concerns, stated, “MAS has reviewed and was satisfied with the relevant processes Income’s board had put in place to address conflicts of interest. With respect to the appointment of his financial adviser on this proposed deal and the decision to enter into the deal with Allianz, the chairman of Income’s board had recused himself.” He further added, “The decision to enter into the deal was made by the board, comprising a majority of independent directors.”

Corporate Governance Questions

Morgan Stanley’s role as the exclusive financial advisor for the transaction was put under scrutiny due to the involvement of Mr Ronald Ong, the Chairman of Income Insurance Limited, who also holds a high-ranking position at Morgan Stanley.

Mr Ronald Ong has been with Morgan Stanley for over 20 years and currently serves as the Chairman and CEO for Southeast Asia. His dual roles have prompted questions about the integrity of the decision-making process behind the appointment of Morgan Stanley as the financial advisor.

Mr Ong was co-opted to the Board of NTUC Income Insurance Co-operative Limited on 23 August 2018 and later elected as a non-independent non-executive director on 24 May 2019.

Since 1 August 2022, he has been the Chairman of the Board and Board Executive Committee of Income Insurance Limited. Additionally, he serves as a Board Member of NTUC Enterprise Co-operative Limited, the majority owner of Income Insurance.

Concerns about potential conflicts of interest were highlighted by authoritative voices in corporate governance.

Professor Mak Yuen Teen, a corporate governance expert and former Vice Dean of the NUS Business School, expressed his astonishment on LinkedIn. “So his firm is the financial advisor, and he’s chairman of Income and chair of its exco, and director of Enterprise. I certainly hope he’s not involved in the decision to appoint MS [Morgan Stanley] as financial advisor as MAS CG guidelines for FIs state that directors should recuse if they have a conflict of interest,” he wrote.

Retired banker Chris Kuan also voiced his concerns on Facebook, highlighting the potential conflict of interest involving Mr Ong and other key figures in NTUC Enterprise.

Kuan stated, “Thanks to a Biz Times, we now know that Income’s chairman is on the board of NTUC Enterprise, the majority owner who sold to Allianz. Income’s deputy chairman is NTUC Enterprises’ CEO. NTUC Enterprises’ best interest may not be in the best interest of Income, having these executives from NTUC Enterprises in key decision-making positions of Income in the event of a sale is a clear conflict of interest and can only be resolved if the two of them recuse themselves from the decision to sell 51% of Income.”

Kuan elaborated on the complexities of the situation, drawing parallels with past instances of conflicts of interest in the financial sector. He emphasized the need for transparency and proper governance to maintain the integrity of the financial market in Singapore.

 

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Community

Fire at train depot causes second Circle Line disruption in two days

Circle Line services in Singapore were disrupted for the second time in two days after a fire broke out at Kim Chuan Depot on 18 September. The fire, which caused a power trip, was extinguished quickly, with normal services resuming shortly after.

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2 hours ago

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19 September 2024

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SINGAPORE: A fire at the Kim Chuan Depot on Wednesday (18 September) caused a brief disruption to Circle Line services, marking the second consecutive day of interruptions on the line.

The fire, which broke out around 8pm in one of the power system cubicles, resulted in a power trip that halted train services for approximately 15 minutes.

A netizen posted in the Facebook group Complaint Singapore, reporting the latest disruption.

According to SMRT, the transport operator, the incident caused several trains to stall, and lighting within the affected trains was briefly impacted.

Engineers at the depot quickly extinguished the fire, and the Singapore Civil Defence Force was activated to assist.

Power was restored by 8.10pm, and normal train services resumed five minutes later at around 8.15pm.

“We appreciate all commuters’ patience and apologise for the longer commutes over the past two evenings,” SMRT said in a statement posted on Facebook, explaining the swift restoration of services after the fire was contained.

In response to the incident on SMRT’s Facebook page, some commuters expressed frustration, noting that the disruptions were happening just before a planned fare increase.

Others raised concerns about the reliability and safety of train services.

Several also criticised SMRT for poor communication during the disruptions, highlighting issues with announcements and equipment at certain stations.

They urged the operator to make improvements before the fare hike takes effect.

The incident followed a major disruption the previous day, when a power fault at 5.50pm on 17 September halted Circle Line services for nearly two hours during the evening peak period.

Eleven trains were stalled inside tunnels for 15 minutes, leaving passengers without air-conditioning.

However, onboard batteries provided partial lighting and ventilation during the outage.

SMRT gradually resumed services, with normal operations restored by 7.40pm.

In a statement on Wednesday morning, SMRT said that staff worked through the night to diagnose the cause of Tuesday’s fault and ensure that all systems were fully operational.

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Civil Society

Three women to contest charges over pro-Palestinian procession outside Istana

Three Singaporean women, charged under the Public Order Act for organizing a pro-Palestinian procession on 2 February, will contest their charges at trial, a court heard on 18 September. About 70 people participated in the February event, carrying watermelon-adorned umbrellas as a symbol of Palestinian resistance while delivering letters to then-Prime Minister Lee Hsien Loong.

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18 hours ago

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18 September 2024

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SINGAPORE: Three Singaporean women charged in connection with a pro-Palestinian procession to the Istana will contest their charges at trial, a court heard on Wednesday (18 September).

The defendants are Annamalai Kokila Parvathi, 35, an activist with the Transformative Justice Collective (TJC); Siti Amirah Mohamed Asrori, 29, a social media influencer; and Mossamad Sobikun Nahar, 25, a community worker.

They were charged in June under the Public Order Act for organizing an unpermitted procession on 2 February.

During the court hearing on Wednesday, the trio, through their lawyer, indicated their intention to contest the charges and claim trial.

Siti Amirah and Mossamad are accused of organizing the procession that occurred between 2pm and 3pm along the perimeter of the Istana, a restricted area.

Kokila is charged with abetting the conspiracy by collaborating with Siti, Mossamad, Alysha Mohamed Rahmat Shah, Anystasha Mohamed Rahmat Shah, and other unnamed individuals to organize the event.

According to a previous police statement, around 70 people gathered outside a mall on Orchard Road at about 2pm on 2 February before marching towards the Istana.

They carried umbrellas painted with watermelon images, symbolizing support for Palestinians amidst the ongoing Israel- Palestinian conflict.

The watermelon, reflecting the colors of the Palestinian flag, has become a symbol of solidarity.

Social media posts indicate that participants of the Letters for Palestine event walked from Plaza Singapura to the Istana to deliver letters addressed to then-Prime Minister Lee Hsien Loong.

The cases have been adjourned to October for pre-trial conferences.

If convicted under the Public Order Act, the women face a potential penalty of up to six months’ imprisonment, a fine of up to S$10,000, or both.

The police have reiterated their call for the public to avoid actions that could disrupt peace, public order, and social harmony in Singapore.

They advised that while strong feelings about the Israel-Hamas conflict are understandable, lawful means of expression, such as participating in organized forums, dialogues, and donation drives, are preferable to illegal protests.

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